Panera Bread CEO Niren Chaudhary oversees executives on his team who he has never even met in person.
It’s understandable, given that Chaudhary took over the brand in May of 2019, about eight months before a global pandemic would turn the restaurant industry, and the world, upside down.
Of the 10 executives who are his direct reports, eight are new hires to the chain, brought in by Chaudhary in recent months as part of a major transformation for the fast casual. What’s more, every member of the executive team is a Panera owner.
“It’s quite a unique model,” Chaudhary said. “Each executive team member has had to make an investment and become an owner.”
Chaudhary began filling in that leadership team at the start of 2020, just before the pandemic landed in the U.S. He hired McDonald’s veterans Lauren Cody and Debbie Roberts as chief customer officer/chief of staff and COO, respectively. The chain’s new chief brand and concept officer, Eduardo Luz, came to Panera after years at Kraft Heinz.
“I’ve interviewed them on Zoom,” he said. “We’ve been working with each other for four to six months, and I haven’t even met some of them.”
But, though virtual meetings, Chaudhary said he has been able to build a sense of culture for the team. The work, as he sees it, is a multi-step process: Build trust so you can create “productive conflict,” he said, which then leads to “commitment” and “clarity.”
Panera has partnered with an outside agency that specializes in “cultural interventions” to work through a process of how to nurture trust, conflict, commitment and accountability among the chain’s leaders, he said.
“As we go forward, we’ll have a clear roadmap on how to build this culture,” he said. “It’s leader-led, rooted in rituals and integrated in all of our people processes.”
As for those rituals, Chaudhary inherited a couple that are central to Panera’s culture.
Every large company meeting starts with a “bread homage,” he said, in which Panera employees literally break bread together and people tell stories about what bread means to them. “It’s a fantastic ritual,” he said.
Another bit of important Panera culture is the “bread bowl,” a peer-to-peer award that celebrates collaboration.
In this virtual age, Chaudhary has been shipping an award to the homes of various recipients, who are told not to open the package until an appointed Zoom call.
“They bring that parcel, and we ask them to open it,” he said. “We recognize people who are doing an exceptional job. It is absolutely possible if you’re committed to it.”
In addition to almost completely remaking its leadership team, Panera has rolled out a number of new initiatives during the pandemic.
Most notable is the chain’s coffee subscription program, the centerpiece of Panera’s goal to become “the Netflix of coffee,” Chaudhary said.
The program, which launched in late February, now has more than a half million subscribers. It is helping to drive loyalty and boost visit frequency, as well as driving up food attachment, he said.
This week, Panera launched a promotion in which new and returning coffee subscribers get three months free.
“It’s a disruptive revenue model,” he said. “We’re off to a solid start.”
Panera also recently launched a new menu platform, flatbreads, which have become one of the chain’s most successful rollouts, he said.
Like most chains during the pandemic, Panera is also considering what its restaurants will look like in the future. Chaudhary doesn’t expect the brand’s dining rooms to disappear, as some brands are mulling, but the restaurants will likely look different going forward. He expects a new prototype to roll out in the third quarter of 2021.
“We are thinking about what the next generation will look like,” he said. “We think on-premise and dine-in is a very important part of our proposition. The box might become smaller and the off-premise area might become bigger. We’re working on all of those dimensions. This is in the works.”
He called 2020 a year in which there’s “honestly no playbook.”
“It has had its moments,” Chaudhary said. “We feel we’ve become stronger because of the various pivots we’ve had to make.”
Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.